The Australian dollar just popped briefly above US77c.
That’s a solid gain of 90 basis points since the overnight lows, and certainly not the behaviour of a currency traders think is about to be smashed by a central bank interest rate cut.
In line with this pickup in the dollar, cash rate futures are currently pricing a 42% chance of a rate cut today. That’s a significant intraday fall from the 53% it stood at earlier this morning.
Here’s the AUD/USD chart, showing gains in early trade and then a surge after the strong housing approvals data that dropped at 11.30am.
Over on the ASX, bank shares have been ripping higher, despite ANZ posting a significant miss on cash profit before the start of trade.
The RBA announces its rates decision at 2.30pm AEST. There’s a full preview here.